Examination Paper of Project Management IIBM Institute of Business ManagementExamination Paper MM.100 Project ManagementSection A: Objective Type & Short Questions (30 marks) This section consists of Multiples choice and Short Note Type questions.Answer all the questions.Part one carries 1 mark each and Part Two carries 4 marks each. Part One:Multiple choices:1. Liquidation value of the firmâs assets could be considered as________________a. The minimum wealth of shareholderb. The maximum wealth of shareholderc. The average wealth of shareholderd. None2. If âPâ be the initial investment, âIâ be the interest rate and âTâ be the time period for whichfunds are invested then interest earned will be______________a. P*I/Tb. P*T/Ic. (P*I*T)2d. P*I*T3. Following the above given conditions, compound Interest be given by___________a. P*(1+I)1/Tb. P*(1+I)Tc. (P*I*T)Td. Can not be calculated4. Firms resorting to âProactive Growthâ?a. Do constant strategic planningb. Watch things happeningc. Never plan but work on fortuned. None5. âSPACEâ stands for___________________6. Increasing marketing expenditure leading to an increased market share is knownas________________a. Market developmentb. Market penetrationc. Market expansiond. Market growth1IIBM Institute of Business Management Examination Paper of Project Management7. If profit after tax is âAâ ,depreciation be âBâ and interest be âIâ then Interest cover ratiois given by______________8. E-V rule is also called_____________a. Mean co variance ruleb. Mean variance rulec. Mean deviation ruled. None9. In case of internally generated funds the opportunity cost to the firm is____________a. Zerob. The lending ratec. The borrowing rated. None10. âPERTâ stands for__________________Part Two:1. Write a note on âSinking Fund Paymentâ. 2. Differentiate between PERT and CPM Model? 3. What is âCapital Asset Pricing Model (CAPM)â? 4. What do you understand by PBP (Payback Period Method)? 5. Briefly explain the planning for procurement? END OF SECTION A Section B: Caselets (40 marks) This section consists of Caselets.Answer all the questions.Each caselet carries 20 marks.Detailed information should form the part of your answer (Word limit 150 to 200 words).Caselet 1 Project partnering at British Airports Authority (BAA)The construction sector in recent times has not been noted for its high levels of performance. Firmslike BAA, who own and operate airports including Heathrow and Gatwick â Londonâs two majorairports â rely heavily on their suppliers, including their construction suppliers, for their ownperformance. Where construction projects are delayed, the financial consequences can be disastrous.Furthermore, the disciplines of working on airport premises, including the security issues, play a2IIBM Institute of Business Management Examination Paper of Project Managementsignificant part in the daily working lives of project staff. New firms bringing new staff onto theairport sites invariably require time to bring them up to speed with the appropriate ways of working.Particular problems include: Security â all personnel with access to airside parts of the airport (i.e. past passport control) mustbe security vetted and trained. The vetting process takes six weeks, so firms must prepare projectstaff in advance;Deliveries â getting materials into the airport is problematic, due to significant congestion andlack of availability of areas for storage;Constant use of terminal buildings by passengers â the closing of areas causes problems withpassenger capacity. The firms are required to work with the constraints of passengers using theareas around where the work is being carried out and physical and noise intrusion must be kept toa minimum;The commercial activities (shops and restaurants) are the economic lifeblood of the business, withlarge ground-rents. The objective of projects involving these areas is not simply to completeworks on time but as early as possible, so that the areas can start to generate rental incomes. The traditional approach to managing fit-out projects (changing internal layouts to accommodatedifferent facilities and in particular new retail facilities) was that every contract was different, andwould be negotiated with different contractors. These would then employ their own sub-contractors tocarry out parts of the work. The approach that has worked far better for all concerned has beenthrough the appointment of lead contractors, with long-term contracts â in most cases 10 years â to bethe prime supplier of fit-out services to B.A.A. This particular contract was awarded to MACE. Aspart of the agreement, BAA has paid for MACE staff to attend training programmes. This hasextended further, with help being offered to their suppliers â of both materials and labour â fordevelopment. Where particular problems are identified, the supplier can be asked to take part in animprovement programme. Satisfactory completion can result in similar long-term deals (tied tocontinual improvement) being offered to those suppliers. In some cases the problems â particularlywith designs for areas â have been the responsibility of BAA. The mechanisms are now in place toidentify these problems and to introduce new practices to avoid them in future.1) Summarise the arguments for such a policy of partnering with a major supplier such as BAA andMACE have done here.2) Carry out further research to identify further examples of partnering in projects. How well do theyappear to be working? Caselet 2The Big DigAny project that involves tunnelling is risky. Any project that involved tunneling under a city whilsttrying to keep that city fully operational, is very risky. When that city is bottom in the USA, it is in arisk category all of its own. This does not, how â ever, excuse the financial performance of thisproject, the results of which are exceptional and even make the performance of previous âstars ofdisasterâ such as the Channel Tunnel, look good. During the 1950s, the Commonwealth ofMassachusetts commissioned new roads as part of a national road-building frenzy that took place atthat time. The result was a partly elevated freeway that cut the city off from its old harbour and overtime coped increasingly less well with the volumes of traffic that were trying to use it. For manyyears, the project had been the subject of much politicking and had been rejected by a number ofnational administrations. In 1993, it was given the go-ahead. At this time the budget was $US2.63IIBM Institute of Business Management Examination Paper of Project Managementbillion, an enormous sum of money for an 8-mile tunnel, but given the technical complexity of thetask, this was considered acceptable. Gradually the costs rose, until in 1998, the estimated final costwas 410.4 billion. By mid-2000 this had risen to $13 billion and by mid-2001 to over $15 billion. Itwas still considered a technical success, but both politically and economically, it was a disaster. Inproject management terms it is also a disaster â a 500 per cent-plus overrun on budget can only bedescribed as âtalentedâ. How did such a financial disaster occur? The first is a feature of many largeâpoliticalâ projects â that the âreal costâ would not be politically acceptable. The original budget wasdeliberately deflated to make the project happen. The second is technical risk â that of the tunnellingprocess. The ground through which the tunnelling is being carried out is reclaimed land that wasoriginally under the sea. The tunnelling process being used was also new, presenting a degree oftechnical novelty.1) How might the project be considered a technical success but an economic, political and projectmanagement disaster?2) Suggest how the 500 per cent-plus overrun might have come about. END OF SECTION B Section C: Applied Theory (30 marks) This section consists of Long Questions.Answer all the questions.Each question carries 15 marks.Detailed information should form the part of your answer (Word limit 200 to 250 words). 1. Define the term Integration Management? And how would you explain the Project plan in detail?2. The funds and personnel requirements of the project change significantly with the stage of its lifecycle. What are the stages in the life cycle of project? Describe them. END OF SECTION C S-2-3008134IIBM Institute of Business Management